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Choice Hotels on Expansion Spree, Opens Hotel in Milwaukee

Choice Hotels International, Inc. CHH continues to expand through franchise agreements. To this end, the company recently announced the opening of Cambria Hotel Milwaukee Downtown, an upscale brand under its Cambria brand. Notably, the four-story, 132-roomed hotel is the third location in Wisconsin and the first in the city. Notably, the hotel will be managed by Concord Hospitality.

The company is confident about the success of this hotel as it offers easy access to the region’s top business and entertainment destinations.

The hotel is in close proximity to the city’s attractions like Lake Michigan, the Milwaukee RiverWalk and Wisconsin Avenue. Janis Cannon, senior vice president of upscale brands stated "We're thrilled to continue the Cambria brand's busy summer openings pace in this vibrant city."

The Cambria brand has been doing solid business. In second-quarter 2019, Cambria's RevPAR increased 2.2%, which outpaced the industry and the upscale chain scale by 110 and 260 basis points, respectively.

Moreover, in the second quarter, the Cambria pipeline expanded to 82 hotels. The addition of these hotels will increase upscale room count by 11,000. The year 2019 is turning out to be an exceptional one for Cambria and the brand is on the verge of opening 50 hotels in top-tier markets.

Share Price Performance

Choice Hotels has gained 22.7% so far this year, comparing favorably with its industry’s 17.9% growth and the S&P 500’s rally of 14.3%. That said, the hotel opening will drive revenues. Moreover, the company’s revenues have improved over the past few quarters. In second-quarter 2019, total revenues came in at $317.7 million, up 8% from the year-ago quarter and topped the consensus mark of $303 million by 4.8%.

Zacks Rank & Other Key Picks

Currently, Choice Hotels carries a Zacks Rank #2 (Buy). A few other top-ranked stocks from the same space are Huazhu Group Limited HTHT, Peak Resorts, Inc. SKIS and Wyndham Destinations, Inc. WYND, each carrying a Zacks Rank #2. You can the complete list of today’s Zacks #2 Rank (Strong Buy) stocks here.

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